What benefits are available if you lose your job?

Losing your job can turn your life and finances upside down. Most people will naturally worry about how they will continue to support themselves and their family.

One thing you can do to keep control of the situation is to make sure you claim the financial support available.

If you’re out of work or worried you’re about to lose your job, this guide will help you understand the out of work benefits you may be entitled to.

What are the main out of work benefits?

There are two main benefits intended for people who are out of work: 

Jobseeker’s Allowance (JSA)

This is intended to tide you over until you find new work. It is paid for up to six months and depends on you having paid enough National Insurance (NI) contributions in the last two years.

Universal Credit

Universal Credit has replaced several older benefits such as Tax Credits and Housing Benefits. It’s means-tested and intended to help with basic living costs when you are on a low income, including when you are unemployed.

If you’ve left work because you’ve been sacked for misconduct, or if you decided to leave without having a good reason, there may be a delay before you can receive benefits. 

What is Jobseeker’s Allowance? 

If you’re a new applicant for JSA, you’ll be claiming the ‘new style’ Jobseeker’s Allowance. Another version, called ‘income-based’ JSA, has now been replaced by Universal Credit.

If you are also eligible for Universal Credit, JSA will reduce your Universal Credit payment. It’s still worth claiming JSA because, unlike Universal Credit, your savings and your partner’s income do not affect your payments. JSA also credits you with Class 1 NI contributions, which may be valuable in the future.

How much Jobseekers Allowance am I entitled to?

The amount of JSA you can receive depends on your age. At the time of writing, the amounts are:

It’s paid into your bank account every two weeks and can be paid for a maximum of six months.

How do I claim Jobseekers Allowance?

You should submit your claim online. This can be done through the official JSA website.

You’ll then be invited to an interview at your local Jobcentre Plus. You need to take proof of identity and the P45 from your last job.

What is Universal Credit?

Universal Credit is paid to people who need help with housing costs and family living expenses, and this includes people who are unemployed.

Unlike Jobseeker’s Allowance, your savings and total household income are taken into account. Therefore, what you receive could be impacted by any redundancy payments and by your partner’s income. It will also be reduced by any JSA you receive.

How much Universal Credit could I be entitled to if I’m unemployed?

The amount of Universal Credit you can get depends on your own circumstances and is reassessed each month. However, at time of writing the standard amounts are:

You may be able to get more to help with housing costs, if you are looking after children, if you cannot work due to sickness or disability, or if you are a carer.

You may get less if you have some income from elsewhere or savings of over £6,000, or if you do not stick to the ‘claimant commitment’ you are asked to sign.

How do I claim Universal Credit?

Like Jobseeker’s allowance, you start your claim for Universal Credit online through the official government website. You can also claim by phone if you can’t do it online.

Like JSA, the next step may be an interview, either at a Jobcentre Plus or over the phone.

Can I get any other help if I am out of work?

If you’re claiming Jobseeker’s Allowance and Universal Credit and you’re still struggling, you may be able to get some further help, depending on your circumstances.

This might include a budgeting loan or budgeting advance to help with emergency household costs, although you must pay this back. If you have children, you may be able to get free school meals or help with childcare costs.  You may also be able to get help with your council tax.

The government website gives more information on the full range of help you might be able to get if you are out of work.

If you feel that you are having difficulties managing your finances, you can find free independent advice at your local Citizen Advice Bureau, from National Debt Line (0808 808 4000), StepChange Debt Charity (www.stepchange.org), or online at www.moneyhelper.org.uk.